With fall starting this weekend, the pumpkin harvest is upon us. The crop is looking pretty good, despite the drought. In fact, the USDA says average retail prices are less than half what they were a year ago.

"It seems like folks are holding off a little bit longer this year and waiting closer to Halloween," says Sarah Frey-Talley, President and CEO of Frey Produce. She is one of the largest pumpkin providers in the country to Libby's , Walmart and Target . Though prices are down, she expects to make it up with greater volumes.

Three years ago Libby's, owned by Nestle , went into Thanksgiving with a pumpkin shortage due to heavy rains. This year Nestle Baking director Jim Coyne says there is plenty of fruit (yes, pumpkin is a fruit) but many Jack-o-Lanterns are slightly smaller due to the drought. "On the positive side, those pumpkins are very dense and just perfect for canning." (Read More:Fans are Going Bananas for Soft Serve Fruit)

Restaurant demand for pumpkin in menu items has soared 38 percent in two years, according to Technomic, with items like pumpkin seed crepes at Adobo Grill and the Pumpkin Martini at Burton's Grill.

"Pumpkin has a healthful perception," says Technomic Executive VP Darren Tristano. He says the ingredient has gotten so popular it's finally gone mainstream. "It's getting to McDonald's in milkshakes, and as a result, it is likely getting to a point of final maturity. We'll look towards sustainability over time."

Yet the industry continues to find new markets.

Sarah Frey-Talley says she is now being approached to provide pumpkins for oil. What is pumpkin oil used for? "I'm probably not going to comment on that," she laughs. "One of the most recent articles I read was that pumpkin oil was being used for prostate health, so I'll leave it at that."

No one's been pumpin' pumpkin products harder than Starbucks , which introduced its seasonal Pumpkin Spice Lattes about a decade ago.

"The category has created a huge following," says Starbucks CEO Howard Schultz. "We are seeing incremental sales growth on the pumpkin spice latte, which is very encouraging." (Read More;Starbucks CEO Draws Comparison to Steve Jobs)

Is it really the new bacon? Does there have to be an either-or? Seattle's Best, a division of Starbucks, has come up with a product where everybody wins. Last month it announced the winner of a best new coffee contest: pumpkin bacon coffee, created by Eileen Gannon, who named it "How to Win a Guy With One Sip." (Read More: Bacon as Currency: Testing the Limits of What It Can Buy)